How Are Funds Used?

A donor recently asked me how funds given to our ministry are used. I thought that was a pretty reasonable question, and so I thought I’d post the response on the site.

A donor recently asked me how funds given to our ministry are used. I thought that was a pretty reasonable question, and so I thought I’d post the response on the site. This is going to be long–I’ll make it as short as possible, but because we’re talking about money I want to be precise.

Technically, all funds given to our ministry are actually given to the Assemblies of God, the denomination with which I am a minister and which sponsors Chi Alpha Campus Ministries. The Assemblies of God promises to disburse gifts in accordance with the wishes of the donor and in accordance with Assemblies of God policies.

So what relevant policies does the Assemblies of God have?

1) Missionaries are assigned an amount of money that they must raise. This is commonly known as a missionary budget.

2) This budget has two components: the personal budget and the work budget.

3) The personal budget covers salaries and benefits (insurance and retirement). For home missions, the Assemblies of God categorizes ministry assignments into one of three cost-of-living indexes. Because Stanford is in Silicon Valley we fall into the highest cost-of-living bracket. Personal budgets are monitored very closely and are adjusted only under extreme circumstances.

5) By Assemblies of God policy, until missionaries fully raise their assigned budget they are not allowed to launch their ministry. This is because the Assemblies wants missionaries to succeed, and as a denomination we’ve learned through painful experience that one of the best ways to guarantee long-term success is by requiring full funding up front.

6) Also by Assemblies of God policy, the money that comes in goes first to support the missionary financially and then to support the missionary’s work. In other words, if only 75% of funds come in one month then it’s the work budget that gets shortchanged instead of the personal budget. This is according to the theory that a mission can survive without office supplies for a month, but if the missionary gets evicted because they can’t pay rent the mission will suffer much more lasting harm.

7) Once a month missionaries are issued a check from the Assemblies of God. That check contains only what has been given that month up to the amount of the assigned personal budget. There is a 5% administration fee taken off the top. Incidentally, that’s an incredibly low administration fee: I’ve seen other missions organizations with rates as high as 20%!

8) The work budget and any excess funds sit in designated accounts. When the missionary has a work expense (say we mail an evangelistic CD-ROM to every student on campus), we pay it out of our own pocket and submit that expense to the Assemblies for reimbursement. We are reimbursed if and only if there are sufficient funds available. That reimbursement is tacked onto next month’s check alongside the personal budget.

9) Here’s the bit to remember: the personal budget acts like a cap whereas the work budget acts like a springboard. We cannot receive more than our assigned salary, but we can receive a theoretically unlimited amount for ministry expenses (as much as people are willing to give). We are responsible to document each ministry expense and demonstrate to the Assemblies of God that it was a legitimate use of God’s money.

So here’s the bottom line: money given is used to pay the minister first and any excess is used to pay for ministry expenses.